Successful second issue of green bonds: borrowed at lower cost than last year

2018-07-04

Lietuvos Energija has successfully distributed the second EUR 300 million issue of green bonds. The bonds have been acquired by 115 investors from 22 countries and the demand for the bonds outstripped the supply 4 times – investors were willing to lend EUR 1.1 billion to Lietuvos Energija. This year Lietuvos Energija successfully distributed the issue at lower cost than last year despite the fact that market conditions were less favourable this year – the yield of 10-year maturity bonds is 2.066 per cent, which is less than 2.193 per cent in 2017 when the first 10-year EUR 300 million green bonds were issued.

International and local investment and pension funds, banks and insurance companies were competing for the securities of the Company. Most of the green bonds have been acquired by investors from France, Germany, United Kingdom, Italy, and Lithuania.

“The success of this green bond issue demonstrates a strong investors’ confidence of the new, ambitious LE 2030 strategy which was presented to investors during the roadshow in London, Frankfurt, Paris, and other European cities last week. In particular, the investors supported the green focus of LE 2030 strategy, financial reliability, its efficient performance, and compliance with the strategic renewable energy objectives of the state. Now, when the global financial markets are less stable compared to the last year, such a successful transaction indicates international recognition and trust in the future of Lietuvos Energija,” said Darius Maikštėnas, Chairman of the Board and CEO of Lietuvos Energija.

Lietuvos Energija intends to use the funds raised for further financing of the investments in wind energy, enhancement of efficiency of the power distribution grid, as well as for the projects of energy production from waste and biomass. Lietuvos Energija undertook to use the funds attracted through the green bonds issue to finance only the investments designated for green energy projects.

In May, Standard & Poor’s affirmed the BBB+ credit rating with stable outlook for Lietuvos Energija. Such rating assigned to the state-owned company is the highest among the peer energy companies in the Baltic States and second best in the sector of similar energy companies in Central and Eastern Europe.

Lietuvos Energija has chosen BNP Paribas, J. P. Morgan, and SEB as Joint Lead Managers and Joint Bookrunners. The green bond issue will be listed on the Luxembourg and the Nasdaq Vilnius Stock Exchanges.